Legislature(2015 - 2016)BUTROVICH 205

04/15/2015 08:00 AM STATE AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Time and Date Change --
Moved CSSSSB 1(STA) Out of Committee
Heard & Held
Moved CSSB 89(STA) Out of Committee
Moved HB 142 Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE STATE AFFAIRS STANDING COMMITTEE                                                                           
                         April 15, 2015                                                                                         
                           8:05 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Bill Stoltze, Chair                                                                                                     
Senator John Coghill, Vice Chair                                                                                                
Senator Charlie Huggins                                                                                                         
Senator Bill Wielechowski                                                                                                       
MEMBERS ABSENT                                                                                                                
Senator Lesil McGuire                                                                                                           
COMMITTEE CALENDAR                                                                                                            
SENATE BILL NO. 89                                                                                                              
"An Act relating  to a parent's  right to direct the  education of                                                              
a  child;   and   relating  to   questionnaires  administered   in                                                              
     - MOVED CSSB 89(STA) OUT OF COMMITTEE                                                                                      
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 1                                                                                        
"An  Act  prohibiting  smoking  in  certain  places;  relating  to                                                              
education  on  the  smoking  prohibition;  and  providing  for  an                                                              
effective date."                                                                                                                
     - MOVED CSSSSB 1(STA) OUT OF COMMITTEE                                                                                     
HOUSE BILL NO. 142                                                                                                              
"An Act establishing Elders' Day."                                                                                              
     - MOVED HB 142 OUT OF COMMITTEE                                                                                            
SENATE BILL NO. 74                                                                                                              
"An  Act relating  to  permanent  fund  dividends; relating  to  a                                                              
medical  assistance   reform  program;  establishing   a  personal                                                              
health   savings   account   program    for   medical   assistance                                                              
recipients;  relating to the  duties of  the Department  of Health                                                              
and    Social   Services;    establishing    medical    assistance                                                              
demonstration   projects;  and   relating  to   a  study   by  the                                                              
Department of Health and Social Services."                                                                                      
     - HEARD & HELD                                                                                                             
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: SB 89                                                                                                                   
SHORT TITLE: PARENT RIGHTS: EDUCATION;  SCHOOL ABSENCE                                                                          
SPONSOR(s): SENATOR(s) DUNLEAVY                                                                                                 
03/25/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/25/15       (S)       EDC, STA                                                                                               
03/31/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
03/31/15       (S)       Scheduled but Not Heard                                                                                
04/02/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
04/02/15       (S)       Heard & Held                                                                                           
04/02/15       (S)       MINUTE(EDC)                                                                                            
04/07/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
04/07/15       (S)       Heard & Held                                                                                           
04/07/15       (S)       MINUTE(EDC)                                                                                            
04/09/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
04/09/15       (S)       <Pending Referral>                                                                                     
04/09/15       (S)       EDC AT 3:30 PM BUTROVICH 205                                                                           
04/09/15       (S)       Moved CSSB 89(EDC) Out of Committee                                                                    
04/09/15       (S)       MINUTE(EDC)                                                                                            
04/10/15       (S)       EDC RPT CS 3DP 1DNP NEW TITLE                                                                          
04/10/15       (S)       DP: DUNLEAVY, GIESSEL, HUGGINS                                                                         
04/10/15       (S)       DNP: GARDNER                                                                                           
04/14/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
04/14/15       (S)       Heard & Held                                                                                           
04/14/15       (S)       MINUTE(STA)                                                                                            
04/15/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
BILL: SB 1                                                                                                                    
SHORT TITLE: REGULATION OF SMOKING                                                                                              
SPONSOR(s): SENATOR(s) MICCICHE                                                                                                 
01/21/15       (S)       PREFILE RELEASED 1/9/15                                                                                
01/21/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/21/15       (S)       HSS, STA, FIN                                                                                          
01/30/15       (S)       SPONSOR SUBSTITUTE INTRODUCED-REFERRALS                                                                
01/30/15       (S)       HSS, STA, FIN                                                                                          
02/11/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
02/11/15       (S)       Heard & Held                                                                                           
02/11/15       (S)       MINUTE(HSS)                                                                                            
03/11/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/11/15       (S)       Moved CSSSSB 1(HSS) Out of Committee                                                                   
03/11/15       (S)       MINUTE(HSS)                                                                                            
03/13/15       (S)       HSS RPT CS 2DP 3NR SAME TITLE                                                                          
03/13/15       (S)       DP: GIESSEL, ELLIS                                                                                     
03/13/15       (S)       NR: STEDMAN, KELLY, STOLTZE                                                                            
04/02/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
04/02/15       (S)       Heard & Held                                                                                           
04/02/15       (S)       MINUTE(STA)                                                                                            
04/09/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
04/09/15       (S)       Heard & Held                                                                                           
04/09/15       (S)       MINUTE(STA)                                                                                            
04/15/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
BILL: HB 142                                                                                                                  
SHORT TITLE: ESTABLISH ELDERS' DAY                                                                                              
SPONSOR(s): REPRESENTATIVE(s) FOSTER                                                                                            
03/09/15       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/09/15       (H)       STA                                                                                                    
03/24/15       (H)       STA AT 8:00 AM CAPITOL 106                                                                             
03/24/15       (H)       Moved HB 142 Out of Committee                                                                          
03/24/15       (H)       MINUTE(STA)                                                                                            
03/25/15       (H)       STA RPT 7DP                                                                                            
03/25/15       (H)       DP:     TALERICO,     STUTES,     KELLER,                                                              
                         GRUENBERG,    VAZQUEZ,    KREISS-TOMKINS,                                                              
03/27/15       (H)       TRANSMITTED TO (S)                                                                                     
03/27/15       (H)       VERSION: HB 142                                                                                        
03/30/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/30/15       (S)       STA                                                                                                    
04/15/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
BILL: SB 74                                                                                                                   
SHORT TITLE: MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES                                                                            
SPONSOR(s): SENATOR(s) KELLY                                                                                                    
03/13/15       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/13/15       (S)       HSS, STA, FIN                                                                                          
03/13/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/13/15       (S)       -- MEETING CANCELED --                                                                                 
03/23/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
03/23/15       (S)       Heard & Held                                                                                           
03/23/15       (S)       MINUTE(HSS)                                                                                            
04/01/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
04/01/15       (S)       Heard & Held                                                                                           
04/01/15       (S)       MINUTE(HSS)                                                                                            
04/02/15       (S)       STA AT 9:00 AM BUTROVICH 205                                                                           
04/02/15       (S)       <Pending Referral>                                                                                     
04/03/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
04/03/15       (S)       -- MEETING CANCELED --                                                                                 
04/08/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
04/08/15       (S)       Heard & Held                                                                                           
04/08/15       (S)       MINUTE(HSS)                                                                                            
04/10/15       (S)       HSS AT 1:30 PM BUTROVICH 205                                                                           
04/10/15       (S)       Moved CSSB 74(HSS) Out of Committee                                                                    
04/10/15       (S)       MINUTE(HSS)                                                                                            
04/11/15       (S)       HSS RPT CS 3DP 1NR NEW TITLE                                                                           
04/11/15       (S)       DP: GIESSEL, ELLIS, STOLTZE                                                                            
04/11/15       (S)       NR: STEDMAN                                                                                            
04/13/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
04/13/15       (S)       Heard & Held                                                                                           
04/13/15       (S)       MINUTE(STA)                                                                                            
04/14/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
04/14/15       (S)       Scheduled but Not Heard                                                                                
04/15/15       (S)       STA AT 8:00 AM BUTROVICH 205                                                                           
WITNESS REGISTER                                                                                                              
SENATOR MIKE DUNLEAVY                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Prime sponsor SB 89.                                                                                      
BETHANY MARCUM, Staff                                                                                                           
Senator Mike Dunleavy                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions regarding SB 89.                                                                       
SUSAN MCCAULEY, Director                                                                                                        
Division of Teaching & Learning Support                                                                                         
Alaska Department of Education & Early Development                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed concerns with SB 89.                                                                            
BRANDON BREFCZYNSKI, Staff                                                                                                      
Senator Bill Stoltze                                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed the Committee Substitute for SB 1.                                                              
SENATOR PETER MICCICHE                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Prime sponsor of SB 1.                                                                                    
ANDREA WATTS, Staff                                                                                                             
Representative Neil Foster                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided an overview of HB 142.                                                                           
DENISE DANIELLO, Executive Director                                                                                             
Alaska Commission on Aging                                                                                                      
Alaska Department of Health and Social Services                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supports HB 142.                                                                                          
HEATHER SHADDUCK, Staff                                                                                                         
Senator Pete Kelly                                                                                                              
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Reviewed the changes made to SB 74.                                                                       
VALERIE DAVIDSON, Commissioner                                                                                                  
Alaska Department of Health and Social Services                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed concerns for SB 74.                                                                             
JON SHERWOOD, Deputy Commissioner                                                                                               
Medicaid & Health Care Policy                                                                                                   
Alaska Department of Health and Social Services                                                                                 
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed questions regarding SB 74.                                                                      
BECKY HULTBERG, President/CEO                                                                                                   
Alaska State Hospital and Nursing Home Association                                                                              
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Addressed concerns for SB 74.                                                                             
JEREMY PRICE, State Director                                                                                                    
Americans for Prosperity-Alaska                                                                                                 
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Supports SB 74.                                                                                           
ACTION NARRATIVE                                                                                                              
8:05:05 AM                                                                                                                    
CHAIR  BILL  STOLTZE  called the  Senate  State  Affairs  Standing                                                            
Committee meeting  to order  at 8:05 a.m.  Present at the  call to                                                              
order  were Senators  Wielechowski,  Coghill,  Huggins, and  Chair                                                              
         SB 89-PARENT RIGHTS: EDUCATION; SCHOOL ABSENCE                                                                     
8:06:11 AM                                                                                                                    
CHAIR  STOLTZE announced  the consideration  of SB  89. [The  work                                                              
draft CS for  SB 89, version 29-LS0735\G was  adopted on 4/14/15.]                                                              
Noting  that  public  testimony   was  closed,  he  asked  if  any                                                              
committee members had amendments to offer.                                                                                      
8:06:51 AM                                                                                                                    
SENATOR  COGHILL moved  to report  the  committee substitute  (CS)                                                              
for  SB 89  from  committee  with individual  recommendations  and                                                              
attached fiscal note.                                                                                                           
CHAIR STOLTZE objected for discussion purposes.                                                                                 
SENATOR WIELECHOWSKI  stated that  he was  not expecting  the bill                                                              
to move  during the  current committee meeting.  He said  the bill                                                              
is  a pretty  significant change  to  Alaska's law  and there  are                                                              
some pretty  significant problems  with the bill.  He said  he was                                                              
wondering  if the  committee  could hear  from  the Department  of                                                              
CHAIR STOLTZE  said the  committee will  hear from the  Department                                                              
of Education.                                                                                                                   
8:07:51 AM                                                                                                                    
SENATOR MIKE DUNLEAVY,  Alaska State Legislature,  Juneau, Alaska,                                                              
sponsor of SB 89, introduced himself.                                                                                           
SENATOR WIELECHOWSKI asked the following:                                                                                       
     On  page 2,  lines  13-17, there  is  a requirement  for                                                                   
     parental  notification of  not  less than  2 weeks,  but                                                                   
     not more  than 6  weeks before  any activity, class,  or                                                                   
     program   that   includes    content   involving   human                                                                   
     reproduction or sexual matters.                                                                                            
He asked  if a  penalty is involved  if a  teacher or  school does                                                              
not follow the strict notification timeline.                                                                                    
SENATOR DUNLEAVY  replied  that currently  there are no  penalties                                                              
in  the  bill.  He  specified  that   following  the  timeline  is                                                              
"expected" to be followed once the bill is passed into law.                                                                     
SENATOR  WIELECHOWSKI inquired  if  a teacher  is prohibited  from                                                              
answering  a  student's  question   on  date  rape  without  first                                                              
receiving a permission slip.                                                                                                    
SENATOR DUNLEAVY  specified that the  bill is an attempt  at being                                                              
reasonable, meaning  there will always  be questions that  come up                                                              
in the  classroom with  the teacher.  He replied  no, there  would                                                              
not be a situation  where a child asks a question  and the teacher                                                              
says, "Hold that thought, we'll get back to you in two weeks."                                                                  
CHAIR  STOLTZE welcomed  him to  depart from  Senator Dunleavy  to                                                              
Superintendent  Dunleavy  and  noted   he  is  probably  aware  of                                                              
existing reporting requirements.                                                                                                
8:10:00 AM                                                                                                                    
SENATOR  WIELECHOWSKI  said  language  on  page  2,  lines  18-20,                                                              
states  that  parents  can  remove children  for  any  reason  for                                                              
religious  holidays as  defined  by the  parent. He  asked if  the                                                              
parent needs  to notify the school  district as to  what religious                                                              
holiday they would be following.                                                                                                
SENATOR DUNLEAVY  answered  that parents  would notify the  school                                                              
so that absence is understood and allowed.                                                                                      
SENATOR WIELECHOWSKI  asked if  a pagan  holiday would  be allowed                                                              
as a religious holiday.                                                                                                         
SENATOR  DUNLEAVY  answered  that  the religious  holiday  is  the                                                              
parent's choice.                                                                                                                
SENATOR WIELECHOWSKI addressed page 2, lines 21-22 as follows:                                                                  
      The school district must provide the parent with an                                                                       
       opportunity to review the content of an activity,                                                                        
     class, performance standard, or program.                                                                                   
He asked  if the proviso gives  parents the opportunity  to review                                                              
tests before being administered.                                                                                                
SENATOR DUNLEAVY  answered no. He  detailed that there will  be no                                                              
avenue to read an assessment and breach security.                                                                               
SENATOR WIELECHOWSKI  remarked that the way he  reads the language                                                              
is that  parents would  have the opportunity  to review  tests. He                                                              
asked if  clarifying language should  be considered  that excludes                                                              
SENATOR  DUNLEAVY  answered that  there  is no  wording  regarding                                                              
SENATOR WIELECHOWSKI  asked where "performance standard"  is noted                                                              
if that included tests.                                                                                                         
SENATOR  DUNLEAVY  answered  no. He  specified  that  "performance                                                              
standard"  would include  publicly  listed standards  for each  of                                                              
the courses.                                                                                                                    
SENATOR WIELECHOWSKI asked how long the parent has to review.                                                                   
SENATOR DUNLEAVY replied  that the period of time for  a parent to                                                              
review has  not been stipulated  in the  bill. He said  the school                                                              
board could decide on the local level.                                                                                          
SENATOR WIELECHOWSKI  asked if guidance should be  provided on the                                                              
length of time a parent has to review.                                                                                          
SENATOR  DUNLEAVY   replied  that  the  bill  allows   the  school                                                              
district to decide.                                                                                                             
8:12:59 AM                                                                                                                    
SENATOR  WIELECHOWSKI  addressed page  3,  Section  3, the  Alaska                                                              
Association  of   School  Boards  (AASB)  testified   against  the                                                              
provision.  He   asked  if  Senator  Dunleavy   considered  AASB's                                                              
SENATOR DUNLEAVY  answered yes.  He specified  that the  belief is                                                              
the concerns of parents outweigh AASB's concerns.                                                                               
SENATOR WIELECHOWSKI  said he contacted AASB the  previous day and                                                              
asked for  information on what  sort of survey questionnaires  are                                                              
being  asked.  He  disclosed  that  AASB  agreed  to  provide  the                                                              
information and  asked that  the committee not  move the  bill out                                                              
prior to receiving the information.                                                                                             
CHAIR STOLTZE noted that mail has been received on the issue.                                                                   
SENATOR DUNLEAVY  remarked that he  was the president of  the Mat-                                                              
Su schoolboard  and was familiar  with AASB's purpose in  terms of                                                              
what it advocates for.                                                                                                          
SENATOR WIELECHOWSKI  asked what the rationale was  behind Section                                                              
3, page 3.                                                                                                                      
8:14:54 AM                                                                                                                    
SENATOR  DUNLEAVY  responded  that  after  discussions  with  many                                                              
parents  that any  type  of  questionnaire should  get  permission                                                              
from parents  before their  children are  surveyed. He  summarized                                                              
that parents  should be  informed so that  they can  make informed                                                              
SENATOR WIELECHOWSKI  addressed page 4, Section 6,  and noted that                                                              
the section  was new where  school districts may  require physical                                                              
examinations of  teachers as a  condition of employment.  He asked                                                              
if Senator  Dunleavy could provide  background information  on the                                                              
8:16:02 AM                                                                                                                    
BETHANY   MARCUM,   Staff,   Senator    Dunleavy,   Alaska   State                                                              
Legislature,  Juneau,  Alaska, answered  that  there  is no  state                                                              
requirement  for school districts  to conduct  physical exams  for                                                              
teachers. She  detailed that  should a  school district  decide to                                                              
require a  physical exam, the  section allows the  school district                                                              
to require  the examination.  She added  that the school  district                                                              
would not be required to pay for the physical exams.                                                                            
SENATOR  WIELECHOWSKI asked  to clarify  that the  purpose of  the                                                              
section is not  to allow school districts to  discriminate against                                                              
those who may have physical disabilities.                                                                                       
MS.  MARCUM  answered  that school  districts  requested  to  have                                                              
their burden  reduced regarding  state requirements  like physical                                                              
SENATOR  WIELECHOWSKI addressed  Section  7 and  said the  section                                                              
states the following:                                                                                                           
     A school  district may not  permit an abortion  services                                                                   
     provider  or an  employee or  volunteer  of an  abortion                                                                   
     services  provider  to offer,  sponsor,  furnish  course                                                                   
     materials,  or  provide instruction  relating  to  human                                                                   
     sexuality or sexually transmitted diseases.                                                                                
He  asked  if  the  school  district  is  required  to  perform  a                                                              
background  check to ensure  that people  who are volunteering  in                                                              
the  classroom or  offering  instruction  are not  volunteers  for                                                              
abortion services providers.                                                                                                    
SENATOR DUNLEAVY answered no.                                                                                                   
SENATOR WIELECHOWSKI  asked if there  is a penalty if  a volunteer                                                              
of an abortion  services provider is  allowed to teach  one of the                                                              
SENATOR DUNLEAVY answered  that there is no penalty  to the school                                                              
district if  unknowingly there  was an  individual in  an official                                                              
capacity  that taught  the class.  He detailed  that there  are no                                                              
background  checks to  determine  if somebody  was  related to  an                                                              
abortion service provider.                                                                                                      
SENATOR WIELECHOWSKI  asked if  the proviso  would apply  to those                                                              
who have financially contributed to abortion services providers.                                                                
SENATOR DUNLEAVY  answered that the intent  of the bill  is not to                                                              
do what Senator Wielechowski described.                                                                                         
SENATOR WIELECHOWSKI  asked if a parental classroom  volunteer who                                                              
happens to be  a volunteer at an abortion services  provider would                                                              
be banned from the classroom.                                                                                                   
8:18:24 AM                                                                                                                    
SENATOR DUNLEAVY  answered that the  intent of the bill  would not                                                              
ban the individual that Senator Wielechowski described.                                                                         
SENATOR WIELECHOWSKI  asked if a  school nurse who happened  to be                                                              
a volunteer  for an  abortion services provider  would be  able to                                                              
provide instruction relating to human sexuality.                                                                                
SENATOR DUNLEAVY  answered that the school nurse's  capacity would                                                              
be  that of  an employee  and not  as  an individual  acting as  a                                                              
representative  or activity  presenter  on behalf  of an  abortion                                                              
service provider.  He specified that  the bill would  not preclude                                                              
the individual in being employed by the school district.                                                                        
SENATOR WIELECHOWSKI  noted that the bill does not  have a penalty                                                              
or require  a background check. He  asked to verify that  a school                                                              
district  that repeatedly  allows  a  volunteer from  an  abortion                                                              
services provider  to offer  a class would  not face a  penalty or                                                              
SENATOR DUNLEAVY answered as follows:                                                                                           
     I think in  a court proceeding they would say  that is a                                                                   
     leading  question. If  there  is an  individual that  is                                                                   
     hired in  an official capacity,  has been vetted  by the                                                                   
     school  district,  whether  they  would be  a  nurse  or                                                                   
     classroom, and  their primary purpose or function  is to                                                                   
     teach  the  content  and adopt  the  curriculum  of  the                                                                   
     school district  or to perform the duties  as adopted by                                                                   
     the   school  district,   this  bill   would  offer   no                                                                   
     penalties for that individual.                                                                                             
CHAIR STOLTZE  stated that his hope  is the questions will  be not                                                              
to affirm a statement but to really ask a question.                                                                             
8:20:32 AM                                                                                                                    
SENATOR  WIELECHOWSKI noted  that  some hospitals  offer  abortion                                                              
services  in emergencies,  primarily in  the case  of the  life of                                                              
the  mother.  He  asked  if  the  bill's  definition  of  abortion                                                              
services provider includes the hospitals that he described.                                                                     
SENATOR  DUNLEAVY answered  that the  hypothetical hospitals  that                                                              
Senator Wielechowski  alluded to could possibly be  covered by the                                                              
SENATOR  WIELECHOWSKI asked  if  the Alaska  Regional Hospital  or                                                              
the Veterans Affairs  (VA) Hospital performs  emergency abortions,                                                              
would  volunteers   from  Alaska  Regional  or  VA   hospitals  be                                                              
permitted to provide instruction.                                                                                               
CHAIR STOLTZE  asked to  verify that  the instruction  pertains to                                                              
SENATOR DUNLEAVY  answered that a  person would not be  allowed if                                                              
the  individual   has  a  direct  association  with   an  abortion                                                              
provider  and  their  purpose  is to  educate  children  on  human                                                              
reproduction and human sexuality.                                                                                               
8:22:17 AM                                                                                                                    
SENATOR  WIELECHOWSKI  stated  that  he has  heard  concerns  that                                                              
performance  standard reviews  could be  affected if  more than  5                                                              
percent of parents opt out of testing.                                                                                          
SENATOR DUNLEAVY  presumed that Senator Wielechowski  was alluding                                                              
to federal  funding where  sanctions are  possible if  assessments                                                              
are less than 95 percent.                                                                                                       
SENATOR WIELECHOWSKI asked what the potential sanctions are.                                                                    
SENATOR DUNLEAVY  answered that there  could be a loss  of federal                                                              
funding  through   Title  1  of   the  Elementary   and  Secondary                                                              
Education Act (ESEA).                                                                                                           
SENATOR WIELECHOWSKI  asked if a loss of funding would  occur on a                                                              
school,  district, or  statewide  level if  5  percent of  parents                                                              
from a  particular school decided  to opt-out their  children from                                                              
SENATOR  DUNLEAVY  replied that  Senator  Wielechowski's  question                                                              
cannot be answered  because to his knowledge, the  loss of funding                                                              
through sanctions has not been tested.                                                                                          
8:24:21 AM                                                                                                                    
SENATOR  WIELECHOWSKI  asked how  much  federal funding  does  the                                                              
state receive for education.                                                                                                    
SENATOR DUNLEAVY  answered that based upon the  types of programs,                                                              
federal  funding  ranges from  $60  million  to $220  million.  He                                                              
specified that  federal funding  is in the  $60 million  range for                                                              
the state's instructional or title grants.                                                                                      
SENATOR WIELECHOWSKI asked if the state could be losing funding.                                                                
SENATOR DUNLEAVY  replied that  since the advent  of the  No Child                                                              
Left Behind  Act of 2001, a  state could lose everything,  but the                                                              
sanction has not  been tested. He noted that  the recent iteration                                                              
of  ESEA by  the U.S.  Department  of Education  was a  unilateral                                                              
change that  was done without  Congress and its  constitutionality                                                              
has been questioned.                                                                                                            
CHAIR STOLTZE asked  that a representative from  the Department of                                                              
Education & Early Development address the committee.                                                                            
8:26:19 AM                                                                                                                    
SUSAN  MCCAULEY,   Director,  Division  of  Teaching   &  Learning                                                              
Support,  Alaska  Department  of Education  &  Early  Development,                                                              
Juneau,  Alaska,  revealed  that  there  is a  potential  loss  of                                                              
funding  for  all  title  programs   where  a  state  law  permits                                                              
students to opt  out of federally and state  mandated assessments.                                                              
She specified that  the U.S. Department of Education  is concerned                                                              
that participation  under  the mandated 95  percent threshold  may                                                              
mask  student performance.  He disclosed  that  total funding  for                                                              
Alaska's title programs is $96.8 million.                                                                                       
SENATOR  WIELECHOWSKI asked  if  Ms. McCauley  had other  concerns                                                              
with any  other parts of  the legislation  or did she  support the                                                              
CHAIR STOLTZE  inquired if  Ms. McCauley's  statement addressed  a                                                              
concern or some issues.                                                                                                         
8:28:34 AM                                                                                                                    
MS.  MCCAULEY replied  that the  department's  primary concern  is                                                              
with  the  potential  federal  funding   implications  from  state                                                              
legislation  that  permits  opting  out.  She  asserted  that  her                                                              
statement  does not  question a  parent's right  to advocate  what                                                              
they feel is best.                                                                                                              
SENATOR WIELECHOWSKI  asked if there  are other implications  from                                                              
the bill that the committee should be made aware of.                                                                            
MS. MCCAULEY remarked  that the state's accountability  system for                                                              
student  learning is  based largely  on  the result  of the  state                                                              
assessments.  She  detailed  that   the  state  assessments  drive                                                              
improvement plans  for schools and districts. She  asserted that a                                                              
domino-effect  could   occur  if  participation  falls   under  95                                                              
percent  where the  state does not  receive a  good indication  of                                                              
how schools and districts are doing.                                                                                            
8:30:23 AM                                                                                                                    
CHAIR STOLTZE asked  if asserting parental rights is  the piece of                                                              
the puzzle that collapses everything.                                                                                           
MS. MCCAULEY  answered that  she would  not characterize  the opt-                                                              
out implications  the way  Chair Stoltze  did. She explained  that                                                              
student learning  growth from year to year and  current mechanisms                                                              
of   school   accountability   are  largely   based   on   student                                                              
performance on state mandated assessments.                                                                                      
CHAIR  STOLTZE  noted  that  the conversations  he  has  had  with                                                              
educators is  that testing  is one of  the most wasted  activities                                                              
in their classrooms.                                                                                                            
SENATOR WIELECHOWSKI  asked if  the testing  is mandated  by state                                                              
or federal law.                                                                                                                 
MS.  MCCAULEY  answered  that that  assessments  are  mandated  by                                                              
SENATOR  WIELECHOWSKI asked  to  verify that  state  law could  be                                                              
changed to say "no testing."                                                                                                    
MS. MCCAULEY answered yes.                                                                                                      
SENATOR WIELECHOWSKI  remarked that  the committee could  consider                                                              
the "no testing"  option. He asked to verify that  the state could                                                              
decide  not to test  and say  that it  does not  want the  federal                                                              
government's $96.8 million.                                                                                                     
8:32:23 AM                                                                                                                    
MS.   MCCAULEY  answered   that  current   federal  law   requires                                                              
assessments  to be  administered  to all  students. She  concurred                                                              
with  Senator  Dunleavy  that potential  consequences  are  a  bit                                                              
CHAIR STOLTZE  commented that the state  will have to look  at all                                                              
of  its relationships  with the  federal government.  He asked  if                                                              
the  department  is  looking  at  the  cost-benefit  from  federal                                                              
MS.  MCCAULEY replied  that a  daily  tension exists  in the  line                                                              
between  funds  that  hopefully   do  good  things  for  students,                                                              
particularly students  with challenges, and the state's  system of                                                              
education done in a manner that the state wants to do.                                                                          
8:34:38 AM                                                                                                                    
SENATOR WIELECHOWSKI  asked if Ms. McCauley is  concerned with the                                                              
requirement  on page  2 to  provide parent  notification not  less                                                              
than two weeks,  but not more than six weeks prior  to discussions                                                              
on  human  reproduction  or  sexual   matters.  He  remarked  that                                                              
showing the  movie "Gone with the  Wind" where people  are kissing                                                              
could be defined as human reproduction or a sexual matter.                                                                      
MS. MCCAULEY  replied that  school districts  are probably  better                                                              
equipped  to respond  to how  parent  notification timelines  have                                                              
impact  on their  processes. She  noted that  many districts  have                                                              
chosen  to have  parent notification  processes  in place  because                                                              
notification is considered  to be a good practice  for educational                                                              
topics  that  parents   may  wish  to  not  have   their  children                                                              
participate  in.   She  said  the  districts  that   do  not  have                                                              
notification   processes   in   place  will   consider   the   new                                                              
requirement  burdensome,  for  others  the  requirement  won't  be                                                              
different from current practices.                                                                                               
8:36:18 AM                                                                                                                    
SENATOR WIELECHOWSKI  asked if the  current law allows  parents to                                                              
withdraw their children from classes, programs, or activities.                                                                  
MS. MCCAULEY  replied that  currently there is  no state  law that                                                              
requires  or prohibits  parents from  withdrawing their  children.                                                              
She noted that  some districts do allow parents  to withdraw their                                                              
SENATOR  WIELECHOWSKI stated  that  to his  understanding,  school                                                              
districts  currently  allow parents  to  withdraw  their kids  for                                                              
issues  that  they are  concerned  with.  He  asked if  a  problem                                                              
exists that the Legislature needs to fix.                                                                                       
MS. MCCAULEY  stated that  she is  not informed  in a  manner that                                                              
can answer  Senator Wielechowski's  question. She reiterated  that                                                              
there are  districts that  have processes  that would  comply with                                                              
the language in the bill.                                                                                                       
SENATOR HUGGINS  said he is  proud to disclose  that he  had three                                                              
children  that graduated  from Alaska  school  systems. He  opined                                                              
that  the most  important  component  for success  of  a child  is                                                              
parental  involvement.  He asked  where  Ms. McCauley  would  rank                                                              
parental involvement on her scale as a professional.                                                                            
MS. MCCAULEY  answered that she  agreed with Senator  Huggins that                                                              
parent involvement  has an  enormous impact  on student  learning,                                                              
achievement, and success.                                                                                                       
CHAIR  STOLTZE   asked  where  Ms.  McCauley  would   rank  parent                                                              
involvement on her scale.                                                                                                       
MS. MCCAULEY  answered that  parental involvement  would  be right                                                              
at the top.                                                                                                                     
SENATOR  HUGGINS  commended  the   bill  sponsor  for  introducing                                                              
legislation that  will reinforce  the bonding between  the system,                                                              
teacher, parent, and student.                                                                                                   
CHAIR  STOLTZE announced  that he  will remove  his objection.  He                                                              
asked  if  any   committee  member  would  like   to  reassert  an                                                              
8:40:41 AM                                                                                                                    
CHAIR STOLTZE announced  that hearing no objections,  CSSB 89(STA)                                                              
moved out of the Senate State Affairs Standing Committee.                                                                       
8:40:45 AM                                                                                                                    
At ease.                                                                                                                        
                   SB 1-REGULATION OF SMOKING                                                                               
8:43:05 AM                                                                                                                    
CHAIR STOLTZE announced the consideration of SB 1. He declared                                                                  
that public testimony for SB 1 is closed.                                                                                       
8:43:50 AM                                                                                                                    
SENATOR COGHILL moved to adopt the CS for Sponsor Substitute                                                                    
(SS) for SB 1, version 29-LS0003\S as the working document.                                                                     
CHAIR STOLTZE objected for discussion purposes.                                                                                 
8:44:13 AM                                                                                                                    
BRANDON BREFCZYNSKI, Staff, Senator Bill Stoltze, Alaska State                                                                  
Legislature, Juneau, Alaska, provided an overview of the CS for                                                                 
SB 1 as follows:                                                                                                                
     Section  1,  page  4,  line  7,  the  word  "shall"  was                                                                   
     changed to "may" adopt regulations.                                                                                        
     Section 1,  page 4, lines 18  and 25, there is  a change                                                                   
     for the  notice of prohibition, all  "Smoking Prohibited                                                                   
     by  Law" signs  are reducing  the  maximum penalty  from                                                                   
     $100 to $50.                                                                                                               
     AS  18.35.316, powers  and  duties of  the  commissioner                                                                   
     from the previous CS has been deleted.                                                                                     
     Section  2, page 5,  line 27,  AS 18.35.336,  violations                                                                   
     and  civil  penalties  from  the previous  CS  has  been                                                                   
     deleted  and amended  to  reflect existing  statute.  AS                                                                   
     18.35.340(a),  civil  complaints   and  penalties  which                                                                   
     requires  the commissioner  to  develop  and maintain  a                                                                   
     procedure  for  processing  reports  of  violations  and                                                                   
     conforming  changes   have  also  been  added   to  this                                                                   
     Section  3,  page 6,  line  1, is  reinstating  existing                                                                   
     statute and adding conforming changes.                                                                                     
     Sections  4-7,  pages  6-7,  they  are  all  reinstating                                                                   
     existing statutes and adding conforming language.                                                                          
     Sections   8-11,  page  7,   are  reinstating   existing                                                                   
     statutes  and adding  conforming  changes. For  clarity,                                                                   
     the  previous  CS,  the  HSS version,  had  all  of  the                                                                   
     statutes  eliminated, so  we  are putting  them back  in                                                                   
     the State Affairs CS.                                                                                                      
8:46:31 AM                                                                                                                    
SENATOR  PETER   MICCICHE,  Alaska   State  Legislature,   Juneau,                                                              
Alaska,  said  the  bill  exists and  has  survived  as  something                                                              
designed  to  protect  Alaskans  from the  effects  of  secondhand                                                              
smoke while they  are at the workplace. He asserted  that the bill                                                              
reinforces  the fact that  the law  is largely self-enforcing  and                                                              
not designed to be heavy-handed or punitive.                                                                                    
SENATOR WIELECHOWSKI  asked what  was specifically changed  in the                                                              
MR. BREFCZYNSKI  explained the  changes from  the Health  & Social                                                              
Services (HSS) version as follows:                                                                                              
   · Removed the new penalties and fines.                                                                                       
   · Changed from the Department of Health and Social Services                                                                  
     (DHSS) to the Department of Environmental Conservation                                                                     
     (DEC) where it exists currently.                                                                                           
   · Removed the powers and duties of the commissioner's section                                                                
     which does not exist in current statute, which included the                                                                
     power to adopt regulations which DEC does not currently                                                                    
   · Reinstated all of the existing penalties, fines, and                                                                       
     enforcement abilities of the Department of Public Safety                                                                   
     and the DEC.                                                                                                               
SENATOR WIELECHOWSKI  asked  for an explanation  of the  rationale                                                              
behind putting enforcement back with DEC.                                                                                       
CHAIR STOLTZE  answered that moving  enforcement back with  DEC is                                                              
consistent with  the intent  of the sponsor.  He said there  was a                                                              
lot of enforcement  uncertainty with HSS and pointed  out that the                                                              
bill  is  largely  a  clean  air  issue  that  falls  under  DEC's                                                              
purview.   He   noted   that  current   enforcement   in   smoking                                                              
prohibition  areas has  mostly been  through self-regulation  with                                                              
very few  citations issued. He summarized  that the change  to the                                                              
bill accomplishes  the sponsor's  goal of  creating the  statewide                                                              
ban without bringing in a lot more government.                                                                                  
8:50:03 AM                                                                                                                    
CHAIR  STOLTZE  removed  his  objection  to adopting  the  CS.  He                                                              
disclosed  that  Senator  McGuire  had expressed  an  interest  in                                                              
addressing  the  issue with  e-cigarettes.  He revealed  that  the                                                              
number one  issue of correspondence  during the session  came from                                                              
individuals who wished  to use e-cigarettes as  their less un-safe                                                              
option  to smoke  as  a cessation  tool.  He  summarized that  the                                                              
discussion  continues   on  e-cigarettes.  He  asked   if  Senator                                                              
Micciche had any comments on e-cigarettes.                                                                                      
SENATOR MICCICHE  replied no. He  said the bill  has a ways  to go                                                              
and all  issues are being  evaluated. He  stated that the  bill is                                                              
about protecting  Alaskan workers  while trying  to find  the best                                                              
way  to do  that  while impacting  the  public  and businesses  as                                                              
little  as possible.  He asserted  that he is  still listening  to                                                              
the public.                                                                                                                     
8:51:49 AM                                                                                                                    
CHAIR STOLTZE  asked if  there were  any amendments. He  requested                                                              
that Mr. Brefczynski address the bill's fiscal notes.                                                                           
MR. BREFCZYNSKI specified the fiscal notes as follows:                                                                          
   · Department of Transportation & Public Facilities (DOT&PF)-                                                                 
     Alaska Marine Highway System: $2,400 for FY16, $1,000                                                                      
   · DOT&PF-International Airports: zero fiscal note.                                                                           
   · DOT&PF-State Equipment Fleet: $1,500.                                                                                      
   · DOT&PF-Administration Support: $10,600 for FY16, $1,100                                                                    
   · Department    of    Commerce,   Community,    and    Economic                                                              
     Development: zero fiscal note.                                                                                             
   · Alaska Court System: zero fiscal note.                                                                                     
   · DHSS-Division of Public Health: zero fiscal note.                                                                          
   · DEC-Division of Environmental Health: zero fiscal note.                                                                    
CHAIR STOLTZE  noted that he questioned  some of the  fiscal notes                                                              
and said commentary will be left for the next committee.                                                                        
SENATOR MICCICHE  detailed that the  fiscal notes are  largely for                                                              
signage and the goal  is to find a donor so that  there is no cost                                                              
to the state.                                                                                                                   
8:53:55 AM                                                                                                                    
SENATOR COGHILL moved  to report SB 1, version  S, with individual                                                              
recommendations and the attached fiscal notes.                                                                                  
8:54:12 AM                                                                                                                    
CHAIR  STOLTZE  announced  that   hearing  no  objections,  CSSSSB                                                              
1(STA)   moves  out   of  the   Senate   State  Affairs   Standing                                                              
8:54:14 AM                                                                                                                    
At ease                                                                                                                         
                  HB 142-ESTABLISH ELDERS' DAY                                                                              
8:56:09 AM                                                                                                                    
CHAIR STOLTZE announced the consideration of HB 142.                                                                            
8:57:20 AM                                                                                                                    
ANDREA  WATTS, Staff,  Representative  Neil  Foster, Alaska  State                                                              
Legislature,  Juneau, Alaska, provided  an overview  of HB  142 as                                                              
     House Bill 142  is an act that establishes  Elders' Day.                                                                   
     Elders  of all cultural  and ethnic  backgrounds hold  a                                                                   
     special  place  in  the  hearts   of  Alaskans.  Elders'                                                                   
     knowledge and  experiences provide a link from  the past                                                                   
     to  the  present,  a  link   that  connects  us  to  our                                                                   
     ancestors.  Elders also serve  a vital role  as teachers                                                                   
     and  mentors, guiding  younger  generations through  the                                                                   
     many  facets  of  life.  Celebrating  and  honoring  our                                                                   
     elders  on  winter  solstice,   a  time  of  change  and                                                                   
     optimism,  not only  recognizes the  value of those  who                                                                   
     came  before us,  but the  significance  of the  lessons                                                                   
     and  knowledge they  selflessly leave  behind for us  to                                                                   
     take into the future.                                                                                                      
CHAIR  STOLTZE  asked if  there  is  a  specific date  for  winter                                                              
MS. WATTS  explained that depending  on the year,  winter solstice                                                              
various from December 21-22.                                                                                                    
CHAIR  STOLTZE   asked  if  winter  solstice  has   any  religious                                                              
MS. WATTS  answered that there may  have been connotations  in the                                                              
past,  but  the  bill  just recognizes  the  change  of  time  and                                                              
SENATOR WIELECHOWSKI asked for a definition of elders.                                                                          
MS.  WATTS answered  that elder  denotes respect  and dignity.  He                                                              
specified that  elder is a word  that really exemplifies  a person                                                              
who is honored  in their community.  She said an elder  could be a                                                              
teacher, grandparent,  coach, or military veteran.  She summarized                                                              
that a  person honored  as an elder  really is in  the eye  of the                                                              
SENATOR  WIELECHOWSKI  asked if  there  is an  age  when a  person                                                              
becomes an elder.                                                                                                               
MS. WATTS answered no.                                                                                                          
CHAIR STOLTZE  asked if  the statutes might  have to  be tightened                                                              
to determine what "venerable" is.                                                                                               
MS.  WATTS   replied  that   "venerable"   is  determined   by  an                                                              
individual's perception of the elder.                                                                                           
8:59:33 AM                                                                                                                    
DENISE DANIELLO,  Executive Director, Alaska Commission  on Aging,                                                              
Alaska Department  of Health and Social Services,  Juneau, Alaska,                                                              
read a statement of support as follows:                                                                                         
     Alaska's  elders, regardless  of  their culture,  ethnic                                                                   
     heritage, or  where they live,  are valuable  members of                                                                   
     our  society; their  wealth  of knowledge,  wisdom,  and                                                                   
     vast  experiences  should   be  honored  and  shared  to                                                                   
     enrich everyone's  life. Older  people have lived  long,                                                                   
     they have  successes as well  as mistakes and  they have                                                                   
     learned from  these life  experiences; for this  reason,                                                                   
     Alaska's   elders,  tradition   bearers,  pioneer,   and                                                                   
     mentors  who link  the past  with the  present can  help                                                                   
     future   generations  by  offering   their  wisdom   and                                                                   
     guidance  to  keep life  moving  forward in  a  positive                                                                   
     direction.  Just  because  this is  a  concisely  stated                                                                   
     piece  of  legislation,  please   don't  undervalue  its                                                                   
     significance.  We feel  that Alaska's  older people  are                                                                   
     truly a  renewable resource and  each one of us  has the                                                                   
     responsibility  to honor  and respect  our elders,  this                                                                   
     is something  that our parents have taught  us over many                                                                   
     generations.  The  renowned  Tlingit elder,  Dr.  Walter                                                                   
     Soboleff,  has  reminded us  to  take  care of  the  old                                                                   
     person that  we will  become, so we  think this  is sage                                                                   
     advice and appreciate your hearing of this bill today.                                                                     
CHAIR STOLTZE asked  where her perception was derived  that elders                                                              
were undervalued.                                                                                                               
MS.  DANIELLO replied  that  she  did not  mean  to  say that  any                                                              
committee member undervalues elders.                                                                                            
9:02:00 AM                                                                                                                    
SENATOR  COGHILL  moved  to  report   HB  142  [29-LS0456\W]  from                                                              
committee  with  individual  recommendations   and  attached  zero                                                              
fiscal note.                                                                                                                    
CHAIR STOLTZE announced  that without objection, HB  142 moves out                                                              
of Senate State Affairs Standing Committee.                                                                                     
9:02:18 AM                                                                                                                    
At ease.                                                                                                                        
         SB 74-MEDICAID REFORM/PFD/HSAS/ER USE/STUDIES                                                                      
9:03:57 AM                                                                                                                    
CHAIR STOLTZE announced the consideration of SB 74.                                                                             
9:04:07 AM                                                                                                                    
SENATOR COGHILL moved  that the committee adopt the  CS for SB 74,                                                              
[version 29-LS0692\F], as the working document.                                                                                 
CHAIR STOLTZE objected for discussion purposes.                                                                                 
9:04:28 AM                                                                                                                    
HEATHER  SHADDUCK,   Staff,  Senator  Pete  Kelly,   Alaska  State                                                              
Legislature, Juneau,  Alaska, reviewed the  changes made to  SB 74                                                              
as follows:                                                                                                                     
     Section 1, page 1, line 10 through page 2, line 3:                                                                         
        · This sections allows DHSS to enter into a                                                                             
          contract  through the  competitive bidding  process                                                                   
          under  the  State  Procurement   Code  for  durable                                                                   
          medical  equipment  or  specific  medical  services                                                                   
          provided in the Medicaid program.                                                                                     
MS. SHADDUCK  detailed that  the new  Section 1  has no  impact on                                                              
the current  used durable medical  equipment bill that  is running                                                              
through  both bodies.  She  continued to  address  the changes  as                                                              
     Section 2, page 2, lines 4-16:                                                                                             
        · Subsection   (a)   directs    the   department   to                                                                   
          establish   a  computerized   income,  asset,   and                                                                   
          identity  eligibility verification  system for  the                                                                   
          purpose   of  verifying  eligibility,   eliminating                                                                   
          duplication  of  public  assistance  payments,  and                                                                   
          deterring   waste   and   fraud   in   the   public                                                                   
          assistance programs.                                                                                                  
        · Subsection (b) directs the department to enter                                                                        
          into  a competitively  bid contract  with a  third-                                                                   
          party  vendor  for  the   eligibility  verification                                                                   
          system.  The department  may also  contract with  a                                                                   
          third-party   vendor  to  provide   information  to                                                                   
          facilitate   reviews   of   recipient   eligibility                                                                   
          conducted by the department.                                                                                          
     Section 4 (Section 2 in Version S):                                                                                        
        · Page 4, line 14-22, (8) redesigning the payment                                                                       
          process,   changes   specifically    list   payment                                                                   
          reforms that should be included:                                                                                      
             ƒ(A)   premium   payments    for   centers   of                                                                   
             ƒ(B)     penalties    for     hospital-acquired                                                                   
               infections,    readmissions,    and    outcome                                                                   
             ƒ(C) bundled payments for specific episodes                                                                       
               of care; and                                                                                                     
             ƒ(D) global payments for contracted payer,                                                                        
               primary care managers, and case managers for                                                                     
               a recipient or for care related to a                                                                             
               specific diagnosis                                                                                               
        · Page 6, lines 7-8, adds new (14) to the annual                                                                        
          report related  to Medicaid reform. DHSS  will also                                                                   
          report  on the  cost, in state  and federal  funds,                                                                   
          for   providing    options   services    under   AS                                                                   
          47.07.030(b), the Medicaid program.                                                                                   
     Section 5, page 6, lines 14-19:                                                                                            
        · Requires the Legislature to approve any new                                                                           
          additional  groups added  to  the Medicaid  program                                                                   
          on or after March 23, 2010.                                                                                           
     Section 12 - (Section 9 in Version S):                                                                                     
        · At the request of Legislative Legal, made                                                                             
          technical   fixes   to   the   conditional   effect                                                                   
          language   in  Subsections   (a)  through  (e)   by                                                                   
          replacing   "that   section"  with   the   specific                                                                   
          provision reference of the bill.                                                                                      
     Conforming changes were made to renumber sections and                                                                      
     references to specific sections.                                                                                           
9:08:17 AM                                                                                                                    
SENATOR  WIELECHOWSKI  asked what  the  rationale  was behind  the                                                              
date: March 23, 2010, in Section 5, page 6.                                                                                     
MS.  SHADDUCK   answered  that   the  intent   was  to   have  the                                                              
Legislature   approve   additional   groups  prior   to   Medicaid                                                              
expansion. She  noted that  the date is  an official  reference to                                                              
when the Affordable Care Act (ACA) went into effect.                                                                            
SENATOR WIELECHOWSKI  asked if any legal opinions  were sought out                                                              
as to whether the section potentially violates federal law.                                                                     
MS. SHADDUCK answered no.                                                                                                       
SENATOR  WIELECHOWSKI   noted  that  Legislative   Legal  Services                                                              
advised his office  that the section potentially  violates federal                                                              
law.   He  added   that   his  office   will   seek  out   further                                                              
MS. SHADDUCK related  that the U.S. Supreme Court  rule will cover                                                              
any groups  that are optional  under ACA.  She said she  will talk                                                              
to Legislative Legal Services to get some legal opinions.                                                                       
SENATOR WIELECHOWSKI  stated that he  would like to hear  from the                                                              
Department of Health and Social Services (DHSS).                                                                                
9:10:56 AM                                                                                                                    
VALERIE DAVIDSON,  Commissioner, Alaska  Department of  Health and                                                              
Social Services,  Juneau, Alaska, stated that she  will comment on                                                              
sections that the department has concerns over as follows:                                                                      
     Section   2,  the   department   actually   has  a   new                                                                   
     computerized   public   assistance    system:   Alaska's                                                                   
     Resource  for Integrated  Eligibility Services  (ARIES).                                                                   
     ARIES pretty  much meets all of the  requirements except                                                                   
     the only  feature it does not  have is an  income, asset                                                                   
     and  identity eligibility  verification  system. We  are                                                                   
     anticipating  that this section  would really require  a                                                                   
     plug-in  feature   for  the  existing  system   and  not                                                                   
     require  us  to  go  out and  develop  an  entirely  new                                                                   
     system which  could cost millions,  but a plug-in  would                                                                   
     be a lot  more affordable and efficient; if  that is the                                                                   
     intent of  the CS,  then we are  a lot more  comfortable                                                                   
     with  that, we  anticipate a  fiscal note  for this  and                                                                   
     that will be forthcoming from our vendor.                                                                                  
     Page  4,  Section  8,  lines 14-21,  we  are  fine  with                                                                   
     these,  the  only  question  we  had  was  on  line  19,                                                                   
     whether  we  might  consider   changing  "and"  to  "or"                                                                   
     because  the bundle  payments  and global  payments  may                                                                   
     conflict;  if on the  other hand this  was to develop  a                                                                   
     payment process  that includes these options,  then that                                                                   
     is  something  certainly a  little  bit easier  to  live                                                                   
     with, but  we want  to make sure  that by having  "and,"                                                                   
     those  don't present  the opportunity  to conflict  with                                                                   
     each other.                                                                                                                
     Page 6, Section  5, this section appears to  require the                                                                   
     department  to seek  the approval  from the  Legislature                                                                   
     for any  mandatory coverage  for Medicaid. The  way that                                                                   
     Medicaid is  administered, there are mandatory  services                                                                   
     and  there  are optional  services.  Mandatory  services                                                                   
     are exactly  that, they are mandatory.  The department's                                                                   
     position is  it's highly unusual  for the department  to                                                                   
     be  required  to  seek  the  advanced  approval  of  the                                                                   
     Legislature  to  comply  with   federal  law.  Mandatory                                                                   
     groups  do  actually get  added.  We  have a  couple  of                                                                   
     examples  and quite frankly,  we don't want  to be  in a                                                                   
     position  of jeopardizing  our  entire Medicaid  program                                                                   
     simply  because we were  not required  with a  mandatory                                                                   
     provision of federal law.                                                                                                  
She  stated   that  Deputy  Commissioner  Sherwood   will  provide                                                              
examples of where some mandatory groups have been added.                                                                        
9:15:32 AM                                                                                                                    
JON  SHERWOOD,   Deputy  Commissioner,  Medicaid   &  Health  Care                                                              
Policy, Alaska Department  of Health and Social  Services, Juneau,                                                              
Alaska, explained  that mandatory  groups do  not get  added often                                                              
and  typically  are  part  of larger  structural  changes  to  the                                                              
Medicaid  program's barter  healthcare  system.  He detailed  that                                                              
examples  include   special  Medicare   beneficiaries   which  are                                                              
mandatory  groups  created to  provide  assistance  to low  income                                                              
Medicare   recipients  with   their   co-payments,  premiums,   or                                                              
deductible  expenses.  He  said  another example  of  a  mandatory                                                              
group that  was added by the ACA  was for children who  age-out of                                                              
state  foster  care, a  mandatory  coverage  group that  would  be                                                              
impacted by the provision.                                                                                                      
9:17:37 AM                                                                                                                    
CHAIR STOLTZE  said the  committee was  not dealing with  Medicare                                                              
expansion,  but  noted  that  there   was  a  lot  of  intertwined                                                              
connectivity. He asked if Section 5 is a deal breaker.                                                                          
COMMISSIONER  DAVIDSON   declared  that  the   department  opposes                                                              
Section 5.                                                                                                                      
CHAIR STOLTZE asked  if the department vigorously  opposes Section                                                              
COMMISSIONER DAVIDSON answered yes.                                                                                             
SENATOR COGHILL opined  that Section 5 appears to  say if Congress                                                              
is  going to  unilaterally  change  the  state's budget  that  the                                                              
Legislature should have a say.                                                                                                  
9:19:09 AM                                                                                                                    
MR.  SHERWOOD  answered  that  the  department  typically  has  to                                                              
submit a  new plan amendment  for a new  federal mandate  in order                                                              
to  assure implementation.  He added  that  the Legislature  would                                                              
become  aware of the  new mandate  through the  budget process  if                                                              
increased  expenditures are  required. He  revealed that  there is                                                              
no  direct  approval for  a  federal  mandate and  state  statutes                                                              
instruct  compliance with  the federal law,  both for  eligibility                                                              
categories and services.                                                                                                        
SENATOR COGHILL  commented that he  is willing to take  the chance                                                              
with  the provision  because  Medicaid has  always  been called  a                                                              
state-federal  partnership.  He  remarked that  unilateral  action                                                              
can  quickly  overrule  the  state  and  create  difficulties.  He                                                              
remarked that  he would  want to  find out prior  to a  bill being                                                              
sent  to the  Legislature  and the  mandate  is  already set  into                                                              
motion.  He  opined that  more  Medicaid  mandates will  occur  as                                                              
Medicare  starts  to  wonder more  frequently  into  the  Medicaid                                                              
wrap-around services.                                                                                                           
CHAIR STOLTZE  remarked that  he has the  same concerns  about the                                                              
state's  appropriations   and  financial  responsibilities   where                                                              
Alaska  is  on the  hook  in  its relationship  with  the  federal                                                              
9:21:54 AM                                                                                                                    
SENATOR HUGGINS  asked if illegal  aliens have access  to Medicare                                                              
or Medicaid via presidential executive orders.                                                                                  
MR. SHERWOOD  answered  that the  general rule  for Medicaid  is a                                                              
person must be a  U.S. citizen or a legal permanent  resident that                                                              
has been  present in the  U.S. for at  least five years.  He noted                                                              
that one exception applies to emergency services.                                                                               
9:24:12 AM                                                                                                                    
CHAIR STOLTZE  noted that his office  received an e-mail  prior to                                                              
the committee  meeting from Mr.  Tony Newman, Legislative  Special                                                              
Assistant  for DHSS.  He asked if  Mr. Newman's  e-mail should  be                                                              
included as the department's position.                                                                                          
COMMISSIONER DAVIDSON answered yes.                                                                                             
SENATOR WIELECHOWSKI  asked if Commissioner Davidson  supported SB                                                              
COMMISSIONER DAVIDSON  answered that DHSS  has no position  on the                                                              
bill,  but  opposes  Section  5. She  added  that  the  department                                                              
believes that reform  and expansion go hand-in-hand.  She said the                                                              
department  would like to  see a  Medicaid expansion provision  in                                                              
the bill.                                                                                                                       
SENATOR  HUGGINS  asked  to  verify that  the  department  has  no                                                              
position on the bill.                                                                                                           
COMMISSIONER  DAVIDSON  reiterated  that  the department  has  not                                                              
taken an  overall position  on the bill,  but the department  does                                                              
oppose Section 5.                                                                                                               
SENATOR  HUGGINS commented  that  he see  reform as  an avenue  to                                                              
have a  conversation about expansion.  He remarked  that expansion                                                              
is not part  of the bill and  he's a bit disappointed.  He thanked                                                              
Commissioner Davidson for stating her position.                                                                                 
9:26:34 AM                                                                                                                    
SENATOR WIELECHOWSKI  noted that  the Governor has  introduced his                                                              
own  bill   to  reform   and  expand   Medicaid.  He   asked  that                                                              
Commissioner Davidson  describe some of the reform  efforts in the                                                              
Governor's bill and how much the state would save.                                                                              
COMMISSIONER  DAVIDSON  answered that  SB  74 and  the  Governor's                                                              
bill are  closely aligned  in terms of  reform efforts.  She noted                                                              
that  some  of the  provisions  in  the Governor's  bill  includes                                                              
specific language on the following:                                                                                             
        · Use an 1115 Waiver to negotiate with the Centers for                                                                  
          Medicare & Medicaid Services (CMS) that will allow the                                                                
          state to take advantage of 100 percent federal match.                                                                 
        · Work with the tribal health system to enhance their                                                                   
          ability to provide care for beneficiaries.                                                                            
        · Engage with an independent third party to make                                                                        
          recommendations and report at the beginning of the                                                                    
          next session for a provider-tax.                                                                                      
She  detailed  that  in  order   to  implement  the  provider-tax,                                                              
separate  legislation  would  be   required.  She  disclosed  that                                                              
Alaska is  the only  state without  a provider-tax. She  explained                                                              
that  most states  typically impose  a  provider-tax on  hospitals                                                              
and nursing homes.                                                                                                              
COMMISSIONER  DAVIDSON  set  forth  that  Medicaid  expansion  and                                                              
reform is healthy for Alaskans and detailed as follows:                                                                         
   · Increases access to healthcare coverage.                                                                                   
   · Saves the state $107 million over the first 6 years.                                                                       
   · Saves resources that the state is currently paying for with                                                                
     100 percent from the General Fund.                                                                                         
   · Good for the economy by infusing over $1 billion in new                                                                    
     resources into Alaska.                                                                                                     
   · Acts as a catalyst for reform.                                                                                             
She  reiterated that  reform and  expansion  go hand-in-hand.  She                                                              
voiced that reform  is a constant process that happens  all of the                                                              
time.  She  asserted  that  DHSS  has  already  undertaken  reform                                                              
efforts based on  current and prior administrations.  She remarked                                                              
that since reform  efforts have been undertaken,  the state should                                                              
do expansion.                                                                                                                   
9:30:26 AM                                                                                                                    
CHAIR STOLTZE  noted that he had  asked at the  previous committee                                                              
meeting  that  Commissioner  Davidson   provide  a  projection  on                                                              
departmental  letterhead, absent  expansion,  for the  anticipated                                                              
growth in Medicaid up to 2030.                                                                                                  
COMMISSIONER    DAVIDSON   answered    that   Medicaid's    growth                                                              
projections are  expected to  range from $4.5  billion to  over $6                                                              
billion by  2032. She disclosed  that the projections do  not take                                                              
into  account   the  reform   efforts  that   the  department   is                                                              
undertaking. She  said DHSS recognizes  that the  Medicaid program                                                              
in its current form  is not sustainable and there's  no choice but                                                              
to reform.                                                                                                                      
9:32:30 AM                                                                                                                    
CHAIR  STOLTZE asked  if there  is  an aversion  to providing  the                                                              
committee with  a projection  document as part  of the  record. He                                                              
said a Medicaid  growth projection from DHSS is  an important part                                                              
of the record.                                                                                                                  
COMMISSIONER   DAVIDSON  replied  that   DHSS  will   provide  the                                                              
document to the committee.                                                                                                      
CHAIR  STOLTZE  noted  that his  request  will  give  Commissioner                                                              
Davidson an  opportunity to  provide her  own numbers  in contrast                                                              
to the projections that she has challenged.                                                                                     
SENATOR WIELECHOWSKI  asked how  much uncompensated care  there is                                                              
in  Alaska, who  pays for  the uncompensated  care,  and how  much                                                              
uncompensated  care  is expected  to  be  covered by  the  federal                                                              
government if Medicaid was expanded.                                                                                            
CHAIR  STOLTZE pointed  out that  the committee  does not  have an                                                              
expansion bill.  He said  the expansion bill  was not  referred to                                                              
the committee.                                                                                                                  
COMMISSIONER  DAVIDSON  answered  that  according  to  the  Alaska                                                              
State  Hospital  and Nursing  Home  Association  (ASHNHA),  Alaska                                                              
hospitals  provide   over  $100  million  in   uncompensated  care                                                              
annually. She  noted that  Arizona saw a  30 percent  reduction in                                                              
uncompensated  care during  its first  6 months  of expansion  and                                                              
added that ASHNHA  has testified that they projected  a 30 percent                                                              
drop in  their uncompensated  care.  She said  with regard  to who                                                              
pays  for uncompensated  care, everyone  does  because a  hospital                                                              
has to increase what they charge to recoup their loss.                                                                          
9:34:36 AM                                                                                                                    
CHAIR STOLTZE noted  that the Governor has said  that expansion is                                                              
reform.  He  asked   if  there  has  been  an   evolution  by  the                                                              
administration that just spending more money is not reform.                                                                     
COMMISSIONER  DAVIDSON  replied  that  she  does  not  recall  the                                                              
Governor  making  the  statement  that expansion  is  reform.  She                                                              
reiterated that  expansion and reform actually  goes hand-in-hand.                                                              
She opined that  if the Governor's position was  that expansion is                                                              
reform, then  he would  probably have introduced  a bill  that was                                                              
just  on expansion,  but he  instead chose  to do  a bill that  is                                                              
both expansion and reform.                                                                                                      
CHAIR STOLTZE commented  that there may have been  an evolution by                                                              
the Governor.                                                                                                                   
SENATOR HUGGINS  said there are studies that  indicate "ObamaCare"                                                              
has had  little or  no effect on  uncompensated care  or emergency                                                              
room usage.                                                                                                                     
9:36:46 AM                                                                                                                    
COMMISSIONER  DAVIDSON replied that  the states  in the  study may                                                              
have  benefited from  a  bill similar  to  Governor Walker's  that                                                              
requires  identifying someone  that  over  utilizes the  emergency                                                              
room department.                                                                                                                
SENATOR WIELECHOWSKI  noted that  Commissioner Davidson  mentioned                                                              
the total savings  on the Governor's reform bill  of $107 million.                                                              
He  said he  thought  the  total savings  over  6  years was  $330                                                              
9:38:27 AM                                                                                                                    
COMMISSIONER DAVIDSON  specified that the savings  for the state's                                                              
general fund would be $107.8 million in the first 6 years.                                                                      
CHAIR STOLTZE  pointed out  that an expansion  bill is  in another                                                              
committee.  He  asked  that  questions  be  general  and  not  too                                                              
involved in the expansion bill.                                                                                                 
SENATOR  WIELECHOWSKI  asked  why  the  state  should  expand  now                                                              
versus waiting until reforms kick in.                                                                                           
9:40:05 AM                                                                                                                    
COMMISSIONER  DAVIDSON asserted  that reforms  had already  kicked                                                              
in.   She  detailed   that  the   reforms  began   in  the   prior                                                              
administration  in addition  to the reforms  that were  undertaken                                                              
in December, including  benefits from the super-utilizer  program.                                                              
She  revealed  that  the  ACA's  enhanced  federal  match  of  100                                                              
percent  for  Medicaid  expansion  only lasts  through  2016.  She                                                              
detailed  that  the  state  has already  missed  $146  million  or                                                              
$400,000  per  day   from  the  federal  match   opportunity.  She                                                              
specified that  federal match  over the  coming calendar  years as                                                              
   · 2017: 95 percent                                                                                                           
   · 2018: 94 percent                                                                                                           
   · 2019: 93 percent                                                                                                           
   · 2020 and beyond: 90 percent.                                                                                               
She  noted that  93 percent  federal  match  is the  same for  the                                                              
state's  aviation or  runway improvements  and 90  percent is  the                                                              
same  match   for  transportation   and  road  improvements.   She                                                              
summarized that the  state has an opportunity to  make Alaskans as                                                              
healthy  and productive  as  possible  using 100  percent  federal                                                              
funds in the first year.                                                                                                        
9:42:28 AM                                                                                                                    
She  addressed  recent  testimony from  two  different  providers:                                                              
PeaceHealth   Hospital  from  Ketchikan   and  Central   Peninsula                                                              
Hospital  from Soldotna.  She detailed  that PeaceHealth  received                                                              
an  innovation grant  from  the Centers  for  Medicare &  Medicaid                                                              
Services  (CMS)  and  spent  $700,000  to be  able  to  lose  $1.5                                                              
million   in  order   to  improve   health   outcomes  for   their                                                              
population. Central  Peninsula said they had interest  in pursuing                                                              
a  Medicaid  demonstration  project described  in  the  Governor's                                                              
bill  that  would  change  the way  Medicaid  is  reimbursed.  She                                                              
specified that  Central Peninsula  preferred to use  the resources                                                              
from  Medicaid  expansion  because  they  would  not  realize  the                                                              
savings and make  much progress. She said similar  to PeaceHealth,                                                              
Central Peninsula intends to spend money to lose money.                                                                         
9:45:43 AM                                                                                                                    
BECKY HULTBERG,  President/CEO, Alaska State Hospital  and Nursing                                                              
Home  Association  (ASHNHA),  Juneau,   Alaska,  provided  general                                                              
comments on SB 74 as follows:                                                                                                   
     We've  had  a  really good  dialog  this  session  about                                                                   
     reform and  I think that is  healthy and it's  also step                                                                   
     one  of what needs  to be  an ongoing  dialog. We  agree                                                                   
     with  the  sponsor  and  the  department  that  Medicaid                                                                   
     costs are growing at an unsustainable rate.                                                                                
     In  my  past  job  I  sat  in  this  building  and  said                                                                   
     healthcare  costs are growing  at an unsustainable  rate                                                                   
     and that is  still the case; but, I think  to understand                                                                   
     why  healthcare costs  are growing  at an  unsustainable                                                                   
     rate, we have  to look at how we pay for  healthcare and                                                                   
     what  we pay  for, I'm  going to  take a bit  of a  step                                                                   
     back  and talk  about that  because it  is essential  to                                                                   
     reform  and how  reform can  actually  move forward  and                                                                   
     make  change. Our  healthcare payment  system right  now                                                                   
     incentivizes  the wrong things.  We work within  what is                                                                   
     called  a fee-for-service system  which basically  means                                                                   
     providers  get   a  fee  for  each  service   that  they                                                                   
     provide. Providers  are thus financially  rewarded based                                                                   
     on  the volume  of care  provided,  not necessarily  the                                                                   
     value of that  care, value meaning that the  quality and                                                                   
     cost of that  care are both considered. So  we know that                                                                   
     nationally  the trend  in  healthcare  is toward  paying                                                                   
     for  value,  toward  paying for  quality  outcomes,  and                                                                   
     toward  incentivizing  providers  for  reduced  cost  in                                                                   
     getting  those  outcomes;  but  this is  a  really  huge                                                                   
     shift  in  how care  is  delivered  and how  payment  is                                                                   
     made,  it  is going  to  take  time,  it's going  to  be                                                                   
     disruptive,  and  systematic   change  will  not  happen                                                                   
     until  those financial  incentives  change. Portions  of                                                                   
     this bill do  begin to address that question  of payment                                                                   
     reform.   Some   payers   are    already   making   this                                                                   
     transformation,  Medicare is  moving toward  value-based                                                                   
     purchasing,  pretty  aggressively;  so this  is  coming,                                                                   
     the question  for us is how  we are going to  respond in                                                                   
     this  environment. Providers  are working  to make  this                                                                   
     transition    in   a    pretty   challenging    economic                                                                   
     environment  and I just  want to  take a minute  because                                                                   
     again, I think this is essential to reform.                                                                                
9:48:12 AM                                                                                                                    
MS. HULTBERG continued her overview as follows:                                                                                 
     Hospitals  are a unique  industry sector  in many  ways.                                                                   
     One of  the most significant  ways that our  industry is                                                                   
     unique  is that  we  are legally  required  to give  our                                                                   
     services  away  for  free, that's  because  the  federal                                                                   
     Emergency  Medical  Treatment  and Labor  Act  (EMTALA),                                                                   
     requires  hospitals to  take care of  patients that  are                                                                   
     present at  the emergency room  whether they can  pay or                                                                   
     not;  this  uncompensated  care  amounts  to  over  $100                                                                   
     million  per year  and  that's a  conservative  estimate                                                                   
     for  Alaska  hospitals, some  hospitals  have  testified                                                                   
     that it is between 10 and 20 percent of their charges.                                                                     
     Alaska hospitals'  other area  of financial pressure  is                                                                   
     Alaska hospitals  are facing very significant  financial                                                                   
     pressures  from the Medicare  program. Alaska  Hospitals                                                                   
     will see  $600 million  in Medicare  reductions in  a 15                                                                   
     year time  horizon; that  started in  2010, it goes  out                                                                   
     to 2024.  There are another  $300 million of  cuts under                                                                   
     consideration,  which  could  bring  the total  cuts  to                                                                   
     Alaska hospitals  to almost  $900 million, that's  a lot                                                                   
     of money coming out of the system.                                                                                         
     The cuts have  come through a couple of ways  and I want                                                                   
     to  address that  and I  think  part of  this refers  to                                                                   
     something  Senator Huggins  has  spoken about  regarding                                                                   
     Medicare  crowd-out. Some of  those cuts  did come  as a                                                                   
     result  of ACA, between  $250 million  and $300  million                                                                   
     of  those  cuts  came  about because  of  the  act.  The                                                                   
     assumption  was that  if uncompensated  care goes  down,                                                                   
     which  it should, if  people have  coverage through  the                                                                   
     exchanges or  through Medicaid expansion,  the hospitals                                                                   
     could  absorb Medicare  cuts.  In states  that have  not                                                                   
     expanded Medicaid,  those uncompensated  care reductions                                                                   
     have  been  much,  much  less.   The  concern  for  non-                                                                   
     Medicaid  expansion-states  is  that the  hospitals  are                                                                   
     going  to take  those  cuts regardless.  Now  I want  to                                                                   
     point  out that  while some  of the  cuts originated  in                                                                   
     ACA,  they  are now  not  really  linked to  it  because                                                                   
     Republican  budget proposals  have kept  the cuts,  even                                                                   
     as  they  propose  repealing  the ACA,  so  we  have  to                                                                   
     assume  those cuts  are here  to  stay and  they are  an                                                                   
     economic reality  that our  industry is now  learning to                                                                   
     deal with.                                                                                                                 
     So in  this economic environment  it is kind of  hard to                                                                   
     talk  about  reform because  what  do  you want  out  of                                                                   
     reform?  The goal of  reform is  bending the cost  curve                                                                   
     and  reducing   the  cost   of  healthcare.  So   in  an                                                                   
     environment  where  we  are  taking  money  out  of  the                                                                   
     system, we  are saying now we  need to take more  out of                                                                   
     the  system, that's  a really  challenging  conversation                                                                   
     to have with any industry.                                                                                                 
9:50:42 AM                                                                                                                    
MS. HULTBERG continued her overview as follows:                                                                                 
     But  we  are here  supporting  reform  for a  couple  of                                                                   
     reasons. First,  we know it's the right thing  to do and                                                                   
     it's absolutely  what we  have to do  as an industry  to                                                                   
     survive.  Secondly,  because  we have  this  opportunity                                                                   
     with  the  carrot  of Medicaid  expansion  to  put  some                                                                   
     money back into  the system to help us reform  as we are                                                                   
     taking   money   out  and   so   I  think   that's   why                                                                   
     understanding that  this bill is related to  reform that                                                                   
     from  a  hospital  perspective  it's hard  to  have  the                                                                   
     reform   conversation  without   having  the   expansion                                                                   
     conversation. Couple  quick reasons, Medicaid  reform is                                                                   
     not a point  in time event, it's an ongoing  process and                                                                   
     again,  I   want  to  thank   this  committee   and  the                                                                   
     Legislature  for really  considering  these issues  this                                                                   
     year.  We  will  be  successful in  reform  and  we  are                                                                   
     having  these conversations  every year,  so I think  it                                                                   
     has  been a good  dialog, but  we shouldn't  necessarily                                                                   
     wait  for  reform  because  we will  never  arrive,  the                                                                   
     industry is  too dynamic, it  is too complex, and  it is                                                                   
     changing  too  fast to  ever  say  that we  have  really                                                                   
     arrived  at   reform.  Second,  innovation   and  change                                                                   
     require  capital.  For  any  business  to  fundamentally                                                                   
     change  its business  model,  and that's  what is  being                                                                   
     required   in  healthcare   right  now,   that  is   not                                                                   
     something  that can  be done without  an investment  and                                                                   
     it is  certainly not something  that is easy to  do when                                                                   
     you are taking  money out of that system,  which is what                                                                   
     is happening  right now. So  if we are going  to succeed                                                                   
     at  reform,  we are  going  to have  to  find  a way  to                                                                   
     invest  to  change  how care  is  delivered,  and  we're                                                                   
     going  to  have  payers  who are  willing  to  have  the                                                                   
     conversations about  how do we pay for value  instead of                                                                   
     paying  for volume, those  two things  have to go  hand-                                                                   
     As  the  commissioner  mentioned,  PeaceHealth-Ketchikan                                                                   
     talked about  how they have  been successful  at reform,                                                                   
     they  have been  successful at  coordinating care;  they                                                                   
     received  a $3 million  innovation  grant to fund  their                                                                   
     project,  the result  of that  project  has been  better                                                                   
     quality outcomes  and reduced  revenue at the  hospital.                                                                   
     So  you have  to  ask the  question,  under our  current                                                                   
     system,  if they  are to  reform without  a grant,  they                                                                   
     will be  spending money to  lose money to improve  care;                                                                   
     there are not many businesses that choose that path.                                                                       
     So how  do we as  a state help  to drive reform  in that                                                                   
     economic  environment? The  answer is  we have to  help,                                                                   
     especially  our  smaller  facilities  that do  not  have                                                                   
     financial  capacity, identify  resources  that they  can                                                                   
     invest  in   reform  and  then  we  have   to  have  the                                                                   
     conversation about  how we pay for value so  that we can                                                                   
     sustain  that  reform;  that's   really  where  Medicaid                                                                   
     expansion   comes   in   because    the   reduction   in                                                                   
     uncompensated care  improves margins, which  then allows                                                                   
     for   the  risk   capital  for   innovation.  From   our                                                                   
     standpoint,  this is  an  issue on  many  levels, it  is                                                                   
     from  a hospital  perspective an  important issue  about                                                                   
     providing  care for  the  vulnerable  in our  community,                                                                   
     it's an  economic issue, and  it's a fiscal  issue; but,                                                                   
     it's also very  much an issue about how we  are going to                                                                   
     sustain  the   business  model  of  the   hospital  that                                                                   
     provides  care in  the community  and  that's, I  think,                                                                   
     for us  a really important  conversation. Our  hospitals                                                                   
     cannot  pick  up  their practices  and  move,  they  are                                                                   
     here,  they  are integral  parts  of the  community  and                                                                   
     often  they are  the  backbone of  a  community. So  the                                                                   
     question for  us and why we  are here saying we  want to                                                                   
     reform  is  that  we  know  we  must  reform  to  remain                                                                   
     viable,  but  the landscape  looks  really  challenging.                                                                   
     According to  the National Rural Health  Association, 48                                                                   
     Critical  Access  Hospitals   (CAH)  have  closed  their                                                                   
     doors. CAH are  hospitals below 25 beds, 48  have closed                                                                   
     their doors  since 2010, and  an estimated 300  more are                                                                   
     at risk.  As we look at  this era of disruptive  change,                                                                   
     we have  to figure out how  we navigate it  and navigate                                                                   
     it in  an environment of  reduced resources;  we believe                                                                   
     reform  is critical  to that  conversation  but we  also                                                                   
     believe   that    expansion   is   critical    to   that                                                                   
     So  Mr. Chairman,  those are  just  my general  comments                                                                   
     about  the  bill. I  am  happy  to answer  any  specific                                                                   
     questions  about the  legislation. I  think we  believe,                                                                   
     again,  reform  and expansion  should  go  hand-in-hand,                                                                   
     but we do  appreciate the efforts of the  bill's sponsor                                                                   
     to address this difficult question of reform.                                                                              
9:55:23 AM                                                                                                                    
CHAIR STOLTZE  pointed out that  the President said ACA  was going                                                              
to  be established  to  cover people  with  better healthcare  and                                                              
spend less  money. He asked if  Ms. Hultberg was  actually shocked                                                              
that the things the President said are a little upside down.                                                                    
MS.  HULTBERG  replied  that the  healthcare  industry  was  going                                                              
through   changes  before   ACA  and  noted   that  the   economic                                                              
environment  for  healthcare was  difficult  before  the ACA.  She                                                              
disclosed  that  businesses were  driving  their  own change.  She                                                              
added that  commercial payers are  the best payers  for hospitals.                                                              
She  opined  that ACA  accelerated  change,  but  it was  not  the                                                              
driving  force  necessarily for  some  of  the changes  that  were                                                              
currently  being seen. She  disclosed that  the American  Hospital                                                              
Association  supported  ACA  and  was willing  to  work  with  the                                                              
administration because  of the increased  coverage covered  by the                                                              
act.  She summarized  that  the state  has  to figure  out how  to                                                              
navigate  the current  business  landscape  in order  to  maintain                                                              
hospitals,  provide   quality  care,  and  ensure   continuity  of                                                              
services regardless  of what an individual thinks  might happen in                                                              
the future or what happened in the past.                                                                                        
CHAIR STOLTZE opined  that "reform" is a broad  and nebulous term.                                                              
He  said  the  terms  "cost  control,"   "cost  containment,"  and                                                              
"sustainability"  narrows the discussion  in making  a sustainable                                                              
program. He remarked  that the approximate $ 6  billion projection                                                              
by 2032  would be  a pretty  healthy chunk  of the state's  budget                                                              
with Permanent  Fund earnings  used well  before federal  mandates                                                              
are met.  He reiterated  that the  term "reform"  leaves a  lot of                                                              
the other  discussions  off of the  table because  everybody  is a                                                              
9:58:41 AM                                                                                                                    
MS.  HULTBERG affirmed  Chair  Stoltze's  point and  related  that                                                              
Medicaid reform can be divided into three "buckets" as follows:                                                                 
   1. Programmatic Reform: making reforms in the existing                                                                       
   2. Benefit Redesign: looking at what other states have done to                                                               
     things like benefit plans and co-payments.                                                                                 
   3. Payment Reform: making sure the state is paying for the                                                                   
     outcomes it wants.                                                                                                         
CHAIR  STOLTZE stated  that he  is  a little  concerned about  the                                                              
sentiment,  "Pass the  bill  and we'll  work  on it."  He said  he                                                              
wants  to make  sure the  committee  understands how  the bill  is                                                              
going  to affect  the state  and  the providers.  He opined  about                                                              
seeing an awakening  of the providers realizing  that expansion is                                                              
not just a free check.                                                                                                          
SENATOR  WIELECHOWSKI commented  that  ASHNHA has  a  lot of  non-                                                              
profits who are  providing care and not making a  profit off of it                                                              
because the government  requires that care be provided  for anyone                                                              
that  walks  in  the  door. He  said  providers  are  losing  $100                                                              
million per  year in uncompensated  care and  asked if it  is fair                                                              
to  say  that the  Legislature  has  the  ability to  help  ASHNHA                                                              
members recover  a significant portion from uncompensated  care by                                                              
expanding Medicaid.                                                                                                             
MS. HULTBERG answered  yes. She asserted that expansion  will help                                                              
ASHNHA help  the state  invest in  the kind  of care redesign  and                                                              
reform  that assists  in lowering  the  cost curve  over the  long                                                              
term which is a real win for everyone.                                                                                          
SENATOR WIELECHOWSKI  stated that the current  healthcare business                                                              
model  is  not  good.  He  remarked  that  the  healthcare  system                                                              
continues to need  significant improvement and he was  glad to see                                                              
the  committee   addressing  reform.   He  asked  if   any  ASHNHA                                                              
organizations  will  go  out  of  business  if  they  continue  to                                                              
provide $100 million-plus in uncompensated care.                                                                                
10:01:42 AM                                                                                                                   
MS. HULTBERG  revealed that  hospital finances  are a  significant                                                              
spectrum where  some facilities are  very profitable and  some are                                                              
on the margin.  She remarked that she is concerned  about ASHNHA's                                                              
Critical  Access Hospitals  as  the economic  environment  becomes                                                              
increasingly difficult.                                                                                                         
SENATOR  WIELECHOWSKI   commented  that  he  would   hate  to  see                                                              
hospitals  shutdown  and  Alaskans  lose access  to  medical  care                                                              
because  ASHNHA  organizations   are  providing  $100  million  in                                                              
uncompensated care.  He asserted  that the Legislature  not taking                                                              
the  opportunity to  fix the  problem in  the next  week would  be                                                              
extremely unfortunate for Alaskans.                                                                                             
10:02:30 AM                                                                                                                   
SENATOR  COGHILL  said a  whole  range  of delivery  services  for                                                              
Medicaid  must be  looked  at, not  just  hospitals.  He asked  if                                                              
ASHNHA organizations are using telemedicine.                                                                                    
MS.  HULTBERG replied  that telemedicine  is  really exploding  in                                                              
the  Lower  48 and  has  a lot  of  promise  in Alaska.  She  said                                                              
Alaska's  tribal  system  is  very sophisticated  in  its  use  of                                                              
telemedicine. She admitted  that Alaska is behind the  rest of the                                                              
country in the  adoption of telemedicine due to  barriers that she                                                              
is not equipped to address.                                                                                                     
SENATOR  COGHILL  stated  that  prior to  adding  more  people,  a                                                              
connection  must  be made  between  hospitals with  expertise  and                                                              
some of  the needs in  other communities.  He noted that  not just                                                              
the hospitals  are feeling  the weight of  change, but  people who                                                              
have  delivered  services  that  have not  been  paid  because  of                                                              
system changes,  like elder care  or child care. He  asserted that                                                              
due  to not  changing behavior,  profit  and nonprofit  deliverers                                                              
who  do  not  get  paid  may  not  be  capable  of  adding  a  new                                                              
10:05:32 AM                                                                                                                   
CHAIR STOLTZE remarked  that there are two bills, one  that is the                                                              
Governor's  bill and  the other  referred to  as the "reform  cost                                                              
containment"   bill.   He   specified  that   the   "reform   cost                                                              
containment"  bill  was directed  by  the legislative  process,  a                                                              
deliberative  consideration   by  three  committees   with  public                                                              
testimony and  multiple hearings. He  said Governor Walker  made a                                                              
pretty  public  demand that  his  bill  have a  less  deliberative                                                              
process of only  two committees. He asserted that  the Legislature                                                              
put  more due  diligence  on the  "reform  cost containment"  bill                                                              
than on  the Governor's bill. He  remarked that the  Governor made                                                              
a  pretty  public  "request  slash  demand"  and  the  Legislature                                                              
yielded to the  invasion from another branch of  government out of                                                              
respect and courtesy.  He said the "reform cost  containment" bill                                                              
process  has  been  more  deliberative  on  cost  containment  and                                                              
reform then  on the  expansion. He  noted that several  admissions                                                              
have been made to  hurrying it up on expansion,  but the committee                                                              
does not deal with  expansion and only has one vehicle  that has a                                                              
very deliberative legislative process.                                                                                          
SENATOR HUGGINS  asked to verify  that nonprofit hospitals  have a                                                              
mechanism  to  distribute some  of  their  revenue back  into  the                                                              
10:07:15 AM                                                                                                                   
MS.  HULTBERG answered  that there  are  specific requirements  to                                                              
maintain  not-for-profit   status  that  a  facility   provides  a                                                              
certain amount of  community benefit. She detailed  that community                                                              
benefit  can  include  uncompensated  care  and  other  subsidized                                                              
services where  the facility  knows that they  are never  going to                                                              
make  break-even,  but the  services  are considered  a  community                                                              
SENATOR  HUGGINS   asked  to  establish   that  the   dollars  for                                                              
providing community benefits come out of the non-profit system.                                                                 
MS. HULTBERG  answered that the  assumption is that  the community                                                              
benefit dollars  would have been paid  in taxes so the  benefit is                                                              
going  back into  the community  in a  different way,  recognizing                                                              
that taxes also are a benefit to the community.                                                                                 
SENATOR HUGGINS asked how big the pot was for larger hospitals.                                                                 
MS.  HULTBERG  answered  that  the  pot was  in  the  hundreds  of                                                              
thousands of dollars.                                                                                                           
CHAIR STOLTZE  pointed out  that the largest  taxpayers in  two of                                                              
the   largest  municipalities   are   private  hospitals:   Alaska                                                              
Regional of Anchorage and Mat-Su Regional in the Mat-Su Borough.                                                                
MS. HULTBERG  agreed that the two  noted hospitals are  very large                                                              
taxpayers and there  is a community benefit associated  with being                                                              
a large taxpayer as well.                                                                                                       
CHAIR  STOLTZE disclosed  that  Mr. Price  had  comments from  the                                                              
private sector.                                                                                                                 
10:09:42 AM                                                                                                                   
JEREMY  PRICE, State  Director,  Americans for  Prosperity-Alaska,                                                              
Anchorage, Alaska,  explained that Americans for  Prosperity is an                                                              
organization  devoted  to  economic   freedom.  He  detailed  that                                                              
Americans  for  Prosperity  define economic  freedom  as  policies                                                              
that  help  small  businesses and  individuals  be  successful  by                                                              
keeping the  cost of government  and taxes low. He  said Americans                                                              
for Prosperity  supports SB 74 and  considers the bill  as a great                                                              
piece of  legislation that takes  a valiant approach  to reforming                                                              
the cost  of Medicaid. He asserted  that reform is the  first part                                                              
of the equation  that must be figured out first.  He noted reports                                                              
that  Medicaid spending  will continue  to  increase even  without                                                              
expansion.  He asserted that  should Alaska  expand Medicaid,  the                                                              
federal  government  may  reduce  their payment  share  after  the                                                              
state is on the hook.                                                                                                           
10:14:08 AM                                                                                                                   
CHAIR  STOLTZE noted  that Commissioner  Davidson  mentioned in  a                                                              
previous committee  meeting that she wanted to meet  and hear from                                                              
all  of the  stakeholders'  voices.  He  opined that  Mr.  Price's                                                              
testimony  represents  the interests  in  a lot  of  folks in  the                                                              
legislators' districts.  He said unfortunately there  has not been                                                              
a willingness  from some stakeholders  to voice their  opinion. He                                                              
stated that  there are a  lot voices in  the Medicaid  debate, not                                                              
just the recipients, but the folks that are paying the bills.                                                                   
MR.  PRICE  pointed  out  that  private  practice  physicians  are                                                              
coming  out  in  support  of reform,  but  against  expansion.  He                                                              
opined  that private  practice physicians  have said  that ACA  is                                                              
killing their  businesses and Medicaid  patients are treated  as a                                                              
charitable  contribution  to their  communities.  He said  private                                                              
practice  physicians  are  out  there,  but  they  are  afraid  of                                                              
testifying   against    the   bill   because    of   intimidation,                                                              
retaliation, losing customers, and taking on the Governor.                                                                      
CHAIR  STOLTZE announced  that he  will recess  to a  call of  the                                                              
chair to  leave flexibility open  to continue the discussion  on a                                                              
major piece  of legislation.  He asked  that Senator Kelly  attend                                                              
the next  committee meeting  to address the  bill's close  out. He                                                              
inquired if Ms. Shadduck had any closing remarks.                                                                               
10:17:20 AM                                                                                                                   
MS.  SHADDUCK  declared  that  she  wanted  to  point  out  a  few                                                              
provisions  that are absolutely  unique to  Senator Kelly's  bill.                                                              
She  opined that  SB 74  has a  bigger focus  on fraud,  extensive                                                              
legislative  reporting requirements,  payment  reform, and  fiscal                                                              
notes  that reflect  costs that  are not shown  in the  Governor's                                                              
bill.  She  pointed   out  that  Commissioner  Davidson   and  Ms.                                                              
Hultberg  both said payment  reform is  absolutely something  that                                                              
should  be  done   by  changing  from  a  fee-for-service   to  an                                                              
incentive  based service.  She detailed  that SB  74 has a  fiscal                                                              
note that  reflects incentive based  service reform.  She revealed                                                              
that  the  Medicaid managed  care  case  management  demonstration                                                              
program  is unique  to Senator  Kelly's bill.  She said  extensive                                                              
studies have shown  that doing managed care or  case management in                                                              
the  Medicaid  program  saves  money  and  noted  that  SB  74  is                                                              
projected to show  up to 20 percent in savings;  however, DHSS has                                                              
shown  no savings in  their fiscal  note and  are not  comfortable                                                              
with submitting an indeterminate fiscal note.                                                                                   
CHAIR STOLTZE  pointed out  that Senator Kelly  will have  a voice                                                              
on the fiscal note conversation in the Senate Finance Committee.                                                                
MS.  SHADDUCK disclosed  that DHSS  was  excited that  SB 74  adds                                                              
some   positions  for   fraud   prevention   and  addresses   cost                                                              
containment; however,  the costs only  show up on  Senator Kelly's                                                              
CHAIR  STOLTZE acknowledged  the  assistance  of Senator  Coghill,                                                              
Representative   Vazquez,  and   legislative  staff  members   for                                                              
providing  ideas  that  made  it  into the  bill.  He  noted  that                                                              
Representative Vazquez  has experience from the Department  of Law                                                              
with  fraud investigations  and  brought  relevant  issues to  the                                                              
discussion. He stated  that SB 74 was a collaborative  effort, but                                                              
the substance of the bill was yielded to the sponsor.                                                                           
10:20:37 AM                                                                                                                   
CHAIR STOLTZE  announced that the  committee will stand  in recess                                                              
to the  call of the  chair. [The committee  did not  reconvene and                                                              
SB 74 was held in committee.]                                                                                                   

Document Name Date/Time Subjects
SB74 SSTA Workdraft CS(STA) version F 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 74
SB1 SSTA CS Workdraft version S - 4.14.2015.pdf SSTA 4/15/2015 8:00:00 AM
SB 1
SB1 Support Documents - Letters of Support to SSTA - 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 1
SB1 Opposition Documents - Letters of Opposition to SSTA - 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 1
SB74 DHSS Response to Committee Question - Medicaid Enrollment and Spending in Alaska Forecast 2015.pdf SSTA 4/15/2015 8:00:00 AM
SB 74
SB89 Support Documents - Additional Letters of Support to SSTA 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 89
SB89 Opposition Documents - Additional Letters of Opposition to SSTA 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 89
SB89 AASB Reply to Committee Questions on 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 89
HB142 Sponsor Statement.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
HB142 Version W.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
HB142 Fiscal Note DOA-FAC 3-20-15.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
HB142 Supporting Document - Letter Kawerak 3-23-15.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
HB142 Supporting Document - Letter of Support Alaska Commission on Aging 4-5-15.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
HB142 Supporting Document - Letter Pioneer Homes 3-26-15.pdf SSTA 4/15/2015 8:00:00 AM
HB 142
SB89 Opposition Document - Letter Elizabeth Miner - 4-14-15.pdf SSTA 4/15/2015 8:00:00 AM
SB 89
SB 74 Explanations of Changes for SSTA Workdraft F.pdf SSTA 4/15/2015 8:00:00 AM
SB 74